By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Humana jumps 20% on possible sale news

U.S. stocks closed lower on Friday after a string of weak economic reports, finishing the week with modest losses.

However, the main indexes recorded a second straight month of gains. The benchmark S&P 500 and Dow industrials gained about 1% in May.

The S&P 500 (SPX) closed 13.40 points, or 0.6%, lower at 2,107.39 and shed 0.9% over the week. Friday's losses were across the board.

The Dow Jones Industrial Average (DJI) 115.44 points, or 0.6%, to 18,010.68 and ended the week 1.2% lower. The Nasdaq Composite (RIXF) ended the session down 27.95 points, or 0.6%, at 5,032 and posted a 0.4% loss over the week. The tech-heavy index gained 2.6% over the month, however.

Investors assessed the second estimate of first quarter gross domestic product, which showed the economy shrank at a 0.7% annual pace during the first three months of the year. A previous reading showed 0.2% growth.

Michael Arone, chief investment strategist at State Street Global Advisors U.S. business, said that while the revision was better than expected, he is still looking for signs that the weakness was transitory and weather related.

"While we did pay attention to the drop in earnings in the report, that can be explained by the stronger dollar, which hurt a lot of multinational companies and the drop in oil prices that hurt energy firms. As the dollar and oil stabilized, we expect to see higher profits that will drive prices in the near term," Arone said.

Jeff Weniger, investment strategist and portfolio manager at BMO Global Asset Management, noted that the market hasn't made a material advance to new highs since the end of last year.

"We think the market is a lot nearer the top, given where the valuation metrics are. There are very few real value stocks in the U.S. at the moment. We have cut our position in U.S. stocks to net underweight from net overweight and favor emerging markets and other developed markets. Long U.S. stocks and the dollar trade is overcrowded," Weniger said.

Read: Fatal flaw in GDP? Investors latch onto new tool to track economy (http://www.marketwatch.com/story/new-tool-to-track-gdp-may-cause-as-much-problems-as-it-solves-2015-05-27)

Wouter Sturkenboom, senior investment strategist at Russell Investments in London, said Wall Street is definitely weary of trying to guess when the Federal Reserve will hike interest rates.

"We are now in this weird zone where people wonder if good news is bad news, or simply good news after all. It looks like it will be difficult for U.S. stocks to break out of its current trading range," said Sturkenboom in emailed comments.

In a negative sign for an economy that contracted in the first quarter, data released Friday showed that consumer sentiment dropped in May to a six-month low.

Separately, the Chicago PMI plunged in May to a reading of 46.2 from 52.3 in April.

Weniger said that the labor market is a lagging indicator and the economy looks as though it reached its cycle peak.

Stocks to watch:Humana Inc.(HUM) shared jumped 20% after news reports that the health insurer is considering selling the company (http://www.marketwatch.com/story/humana-considers-sale-of-company-2015-05-29-131034749), a move that could trigger a widely anticipated wave of consolidation in the industry.

Shares of chip maker Altera Corp.(ALTR)(ALTR) rose 4.2% after the New York Post reported Intel Corp.(INTC) is nearing a deal (http://www.marketwatch.com/story/intel-in-talks-to-buy-altera-for-15-billion-report-2015-05-29) to buy its smaller rival. Intel shares rose 1.1%.

Shares of Google Inc.(GOOG) fell 1.4% even as the company unveiled Android Pay (http://www.marketwatch.com/story/google-switches-up-mobile-payments-with-android-pay-2015-05-28), a new mobile payment service that is expected to compete directly with Apple Inc.'s(AAPL) Apple Pay.

For more on today's notable movers read Movers & Shakers column (http://www.marketwatch.com/story/amazon-google-gamestop-in-focus-2015-05-29).

Other markets: In Asia, the Shanghai Composite finished with a slight loss on Friday, after a 6.5% plunge Thursday.

European stocks (http://www.marketwatch.com/story/european-stocks-drop-as-greece-worries-persist-but-stocks-looking-at-monthly-win-2015-05-29) closed lower as a deadline approached for Greece to make the first of debt repayments to the International Monetary Fund in the space of two weeks.

(http://www.marketwatch.com/story/new-tool-to-track-gdp-may-cause-as-much-problems-as-it-solves-2015-05-27)The dollar (http://www.marketwatch.com/story/dollar-lower-against-yen-on-profit-taking-2015-05-29-2103228)(USDJPY) strengthened against the yen, last changing hands around 124.08 yen.

Also read: Here's what's driving the dollar-yen trade (http://www.marketwatch.com/story/heres-whats-driving-the-dollar-yen-trade-2015-05-28)

Oil prices (http://www.marketwatch.com/story/oil-extends-gains-investors-eye-next-weeks-opec-meeting-2015-05-29-2103236)(CLN5) rallied, gaining 4.5% to settle $60.30, helped by drops in crude supplies and rig counts. The commodity gained 1% over the month.

Gold prices (http://www.marketwatch.com/story/gold-erases-loss-after-gdp-data-2015-05-29)(GCN5) settled slightly higher at $1,189.80, posting the first monthly gain since January.

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